Tuesday, August 29, 2006

"Visa to Disclose Regs, With Strings Attached" (The Green Sheet)

Visa U.S.A. announced recently that it will disclose its operating regulations to both merchants and U.S. Senators, effective Sept. 1. But there's a hitch: Merchants will be subject to nondisclosure agreements (NDAs). Visa stated it will make the regulations available "to important stakeholders in the Visa system" as a step toward transparency.

"While Visa's merchant rules guide has been available for over a decade, and it is among the most viewed documents on our Web site, some merchants have asked us to provide even more detail," the Association said in a statement.

"We are responding to this request by sharing Visa's operating regulations with those qualifying merchants and third-party agents who participate in the Visa system. The operating regulations will be available beginning September 1, 2006, and will be provided under a nondisclosure agreement to protect confidentiality." At a hearing July 19 before the
Senate Judiciary Committee on interchange fees ("Summer heat wave sweeps Senate Judiciary interchange hearing" in this issue), a Visa representative agreed to provide the committee with a copy of its operating regulations. Visa will do so by the end of August, the Association told The Green Sheet. It was not able to say by press time whether Senators will be subject to an NDA.

"Sen. [Arlen] Specter, [R-Pa.] was direct about it, that they should be made available, and not under an NDA," W. Stephen Cannon said in an interview. Cannon testified on behalf of the Merchants Payments Coalition. "The Senator said he'd provide them to me to clear up any discrepancy of what the rules did or didn't say."

Visa said it expects the rules disclosure to demonstrate the complexity of the industry and the lengths to which Visa has gone to balance the interests of members, merchants and consumers. "In sharing them, our goal is to provide partners with the information they are interested in, without sacrificing Visa's intellectual property or the security of the system," Visa stated.

Other recent steps toward openness Visa has taken include the publication of its annual report and the appointment of independent directors to its board. "We are now taking transparency one step further," Visa stated.

[source: The Green Sheet]